Mind CTI posts $1.31m net profit on $5m revenue
CEO Monica Eisinger: "The strategic acquisition of Sentori strengthened our presence in the US and in the mobile market."
Globes correspondent 21 Feb 06 11:16
Mind CTI (Nasdaq: MNDO; TASE: MNDO) a provider of convergent end-to-end billing and customer care solutions for VoIP, Mobile, 3G and Triple-play carriers worldwide, last night announced results for the fourth quarter and year ended December 31, 2005.
Net profit was $1.31 million or $0.06 per diluted share, compared with a net profit of $2.14 million or $0.10 per share in the fourth quarter of 2004.
Fourth quarter revenue was $5.04 million, a 3% increase over the fourth quarter of 2004.
For the full year 2005, net profit was $4.06 million or $0.19 per diluted share, compared with a net income of $6.88 million or $0.32 per diluted share in 2004. Revenue was $15.6 million, a 12% decrease from 2004.
The company's cash position decreased by $8.51 million to $40.2 million on December 31, 2005, due mainly to a dividend paid in March 2005 and the acquisition of Sentori.
Mind CTI chairperson and CEO Monica Eisinger said, "The strategic acquisition of Sentori strengthened our presence in the US and in the mobile market. During the quarter we completed deployments for some existing orders and had some new wins. The revival of the US markets and our focus on the wireless markets combined with our successful integration of the two businesses result in a stronger than ever backlog and pipeline, which we expect to lead to growth in the coming quarters."
MIND also announced the appointment of Shalom Bronstein, 56, as the company's new CFO, replacing Arie Ganot who intends to pursue other business opportunities.
Published by Globes [online], Israel business news - www.globes.co.il - on Tuesday, February 21, 2006
globes.co.il
Sentori bolstered Q4 sales for Mind CTI
21.2.06 | 10:45 By Omri Cohen
Monica Eisinger professes to be highly satisfied with the record results that Mind CTI (Nasdaq: MNDO), the hi-tech company she chairs and leads as CEO, achieved in the fourth quarter of 2005. During the year the billing and customer-care software provider achieved a long-term goal of finding a suitable acquisition, and completing the transaction in a manner that will benefit the company, she explains.
The resurgence of the U.S. telecommunications market and the company's right focus on cellular, and the winning combination with Sentori (which Mind CTI bought in August 2005 for $5.1 million cash), resulted in Mind CTI ending 2005 with its highest backlog of orders ever.
Like Mind CTI, Washington DC-based Sentori develops customer care and billing solutions to wireless carriers and mobile virtual network operators. It now operates as the Americas headquarters for MIND.
"Supporting the Sentori product line is strategic for MIND," Eisinger commented in January: "Sentori has recently experienced growth in the demand for its wireless billing solutions in the North American market and MIND is geared up to assist Sentori in delivering quality deployment and premium support to its existing and future customers in the global markets."
In short, the acquisition of Sentori turned around Mind's fortunes, after slipping sales in the first half of 2005. It also strengthened Mind's presence in the cellular and American markets, Eisinger says.
For the fourth quarter of 2005 Mind reported $5 million revenues, up 24% sequentially and 3% year over year. It had well beaten its guidance of $4.6 million in revenues.
Operating profit increased 17% to $1.2 million in the second quarter, but it did not suffice to cover the havoc wreaked by Mind's adventures with derivatives.
In early July, Mind shocked the market by issuing a financing income warning for the second quarter of 2005. Eisinger explained that the company had habitually placed its cash in structured deposits at foreign banks, which had supplied handsome annual financing income of 7%.
But structured deposits are highly risky. In November 2004, Mind had placed $30 million in 7-10 year structured deposits that interest - but only as long as six-month Libor is below 3.5%.
In mid-May fortune turned against Mind. Six-month Libor climbed past 3.5% and the $30 million stopped generating interest.
At least the terms of the structured deposits gave Mind one comfort; in November the threshold rose from 3.5% to 4.5%, so the deposit could have started generating interest again, if Libor stopped rising.
But it didn't. Libor continued to climb, crossing 4.5% in November. At present it's at 4.9% and Mind still isn't getting returns on most of its cash.
Financing income amounted to all of $112,000 in the fourth quarter of 2005, compared with $1.2 million in the parallel quarter. Its net profit therefore sank by 39% year over year to $1.3 million or 6 cents per share.
The difference is material: financing income had been key to Mind's profits over the years. In 2004 they were 55% of pretax profit, dropping to 31% in 2005 (because of the nonpayment of interest on the structured deposits).
For the year 2005, Mind CTI reported a 12% slide in revenues to $15.6 million, and a 41% tumble in net profit to $4.1 million or 19 cents per share.
The company will still be distributing dividends, in keeping with its policy, but it simply has less to share. It will be paying shareholders $4 million at the end of March.
In parallel Mind announced the resignation of chief financial officer Arie Ganot. He will be succeeded by Shalom Bronstein, 56, who hails from Matav Cable Systems (NASDAQ: MATV). The appointment becomes effective February 20, 2006.
haaretz.com
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